Hugh Hendry Is Betting On No QE3 And The US Missing Its Growth Estimates

Hugh Hendry's May Eclectica investor letter is out and he's, no surprise, bearish on the U.S. economy.

According to the letter posted on The Tail Chaser, he's betting that without QE and zero short interest rates, the American economy will not meet the demanding growth rates anticipated for the second half of this year.

So he's placing bets on USD and GB interest rates.

He was up 4.6% in May, pretty awesome compared to the other numbers we're seeing in hedge funds recently. (For example, Soros's hedge fund is doing so badly that his Quantum Fund is now 75% in cash.) Hendry made money in interest rates, shorts in Japanese financials, and lost money in Japanese CDS exposure in May.

He writes:

What we might be witnessing today [is] the transition of low emergency rates into sustainably lower rates for longer.